MANCHESTER — Public Service of New Hampshire is predicting a 2.2 percent increase in overall electric rates as of Jan. 1, primarily because of changes in state and regional environmental policies, according to PSNH officials.

The company won't file its formal rate request with the Public Utilities Commission until December, followed by public hearings, but it is required to provide a forecast to regulators well ahead of the filing.

An average PSNH energy service customer using 500 kilowatt hours of electricity per month and paying $87.75 would see that bill increase to $89.69 if the forecast holds true and the PUC ultimately approves the rate suggested.

PSNH is forecasting an energy service charge of 8.96 cents per kwh, up from the current rate of 8.62 cents. Customers can choose to purchase energy service from a competitive supplier, some of which are offering lower rates, but PSNH will continue to deliver the electricity.

ENH, one of the largest competitive suppliers, is now offering 7.89 cents per kwh guaranteed for one year, while North American power is offering 7.59 cents on a 12-month guarantee.

Nearly a penny of the PSNH energy service rate, 0.98 cents to be exact, is due to the costs associated with pollution control systems installed at the company's Merrimack Station coal-fired plant in Bow. Without those costs, PSNH would be charging 7.98 cents per kwh for energy, a rate much closer to its competitors.

The PUC has an investigation under way to determine if it's in the best interest of the state's consumers for PSNH to retain ownership of those coal-fired plants (See related story).

"If you take away the cost recovery associated with the scrubber (at Merrimack Station), we're actually very close to, if not lower than, the price that some suppliers have been offering," said PSNH spokesperson Martin Murray.

The energy service charge makes up about half the electric bill, with the remaining costs associated with distribution, delivery and stranded costs. "Our delivery charges are set through 2015," said Murray, "so I don't believe there are any changes in delivery charges scheduled for Jan. 1."

Murray said the overall rate increase for residential customers is likely to be in the 1.9 percent range, because large, commercial customers pay more of the stranded costs the utility incurred through deregulation.

"The stranded cost charge isn't the same for big customers as little customers," he said. "The 2.2 percent is an average of all rates for all classes. For residential it will be a smaller hit."

Murray said the cost of generating electricity has been stable for the company, and that the company would not be seeking any increase in the energy supply charge if not for higher costs associated with the state's Renewable Fuels Portfolio and the New England Regional Greenhouse Gas Initiative.

He said the company had to spend $8 million more this year to comply with the renewable fuels mandates. The utility received a $3 million refund this year from REGGI as opposed to $9 million the year before because of changes in the law that controls carbon emissions in the states that are partners in the initiative — Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont.

More Headlines

U.S. Energy Secretary Rick Perry asked an oil industry advisory council on Monday to help find ways for oil drillers to exploit technology that captures carbon emissions from coal-fired power plants,...